The world’s wealth on paper is increasingly out of balance with the actual economy, and it could end in disaster

The world’s wealth on paper is increasingly out of balance with the actual economy, and it could end in disaster

Becky Robertson

Thu, August 6, 2026 at 6:35 PM GMT+3 5 min read

Even with all of the carefully tracked metrics for measuring economies, wealth and debt the world over, it's nearly impossible to properly wrap one's head around the globe's collective assets, let alone quantify them.

Still, experts try, drawing up "balance sheets" of sorts to distill all of humanity's unfathomable resources and deficits into a figure can help yield some insights into how we are faring over time.

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McKinsey Global Institute, the research subsidiary of the well-known consulting firm, is one of the sources that's been monitoring these benchmarks in recent years, taking a broad look at all assets and liabilities on Earth in an attempt to "provide a lens into economic health."

Its latest report, though, has a troubling thesis: that our international financial statement has become distinctly "out of kilter" with the economy, as less and less concrete capital — and progressively more theoretical returns — make up the quadrillions of dollars of wealth that exists.

Money on paper is outpacing investment and productive output

This wealth is, McKinsey writes, now "rooted in asset values rising faster than real economy investment and growth, creating record levels of global wealth 'on paper,' to a greater extent than previously."

The primary suspects behind the trend are China and the U.S., where the surging values of certain existing commodities and businesses are key drivers of an overall jump in "wealth" despite not being true indicators of real value formation. This is also amid record debt in both countries.

As the researchers write, "When equity values rise faster than GDP, capital may disproportionately go to asset repurchases, sometimes with a lot of leverage. This may push up valuations, but leave the economy deprived of the type of investment that generates long-run growth."

One big elephant in the room is the monumental expenditures in the realm of AI, much of which is funded by precarious circular financing and, even worse, debt, all for something that has yet to prove its worth. Some experts argued that AI did basically nothing to the economy in 2025, despite so much being poured into the sector.

But, the runaway stocks of these tech companies pushed world equities up by a staggering 20% over the course of the year, raising their values to nearly four times the US's total GDP. Amid the flurry of the buildout, McKinsey notes that it's " imperative that corporate earnings deliver on high expectations" — something that still isn't guaranteed.

This all serves as more solely "on-paper" growth, which McKinsey doesn't deem as healthy economic progress.

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Where the divergence could lead

While household wealth across all nations has been surging disproportionately to GDP for some 30 years, last year's numbers show a particularly drastic rift, with the world's fortune reaching the highest level ever recorded — $1.7 quadrillion in total assets and $570 trillion in household wealth — while many economies flatline.

"Productivity did not keep pace across advanced economies, nor did real wealth formation through net new investment," the writers state, pointing to the best and most obvious possible solution: higher productivity. But other, less desirable outcomes are also possible.

"Several asset classes have grown further out of balance with the underlying economy, raising the possibility of corrections through inflation or asset valuation losses," they state.

What's even more startling is the fact that this divergence between household wealth and productivity may be even worse than it seems due to somewhat artificially inflated GDP numbers.

High immigration bumps headline GDP by expanding the consumer base, but the resulting figure doesn't take into account the worsening wealth divide — under which many are not seeing their earnings and assets accelerate at the rate that GDP stats would suggest — and the severe impacts the influx has on things like home prices, which falsely contributes to higher overall wealth though nothing new has been created or invested in.

Add to that the exorbitant AI capital expenditures without corresponding tangible productivity or commercial gains, and the balance sheet could be even more off.

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This article originally appeared on Moneywise.com under the title: The world's wealth on paper is increasingly out of balance with the actual economy, and it could end in disaster

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